Necco, LLC v. Commonwealth of Kentucky Cabinet for Health and Family Services

• Court: Court of Appeals of Kentucky
• Decided: May 13, 2021
• Docket: 2020 CA 000732
• Status: Unknown

Opinion

RENDERED: MAY 14, 2021; 10:00 A.M. NOT TO BE PUBLISHED

Commonwealth of Kentucky Court of Appeals

NO. 2020-CA-0732-MR

NECCO, LLC. APPELLANT

APPEAL FROM HARDIN CIRCUIT COURT v. HONORABLE KEN M. HOWARD, JUDGE ACTION NO. 18-CI-01172

COMMONWEALTH OF KENTUCKY, CABINET FOR HEALTH AND FAMILY SERVICES APPELLEE

OPINION AFFIRMING

** ** ** ** **

BEFORE: JONES, MAZE, AND L. THOMPSON, JUDGES.

THOMPSON, L., JUDGE: Necco, LLC (“Appellant”) appeals from an order of

the Hardin Circuit Court affirming two citations issued by the Commonwealth of

Kentucky, Cabinet for Health and Family Services (“Appellee”). Appellant argues

that the citations were not supported by substantial evidence and that Appellant did not receive the procedural due process to which it was entitled. For the reasons

addressed below, we find no error and affirm the order of the Hardin Circuit Court.

FACTS AND PROCEDURAL HISTORY

Appellant is a child-placing agency licensed by the Commonwealth of

Kentucky. Appellee regulates child-placing agencies in the Commonwealth. On

March 7, 2018, Appellant placed three minor children into foster care at the home

of Billy and Travis Embry-Martin. On May 8, 2018, one of the children, “H.P.”,1

was taken to the emergency room at Hardin Memorial Hospital and then

transferred to Kosair Hospital in Louisville, Kentucky with a head injury sustained

while in the care of Billy Embry-Martin. H.P. died of the injury on May 10, 2017.2

Appellee conducted an investigation into H.P.’s death and an audit

beginning on May 15, 2017. The audit resulted in a Statement of Deficiencies

being issued against Appellant for three regulatory citations, namely C2761,

C3271, and C3791. Pursuant to Kentucky Revised Statutes (“KRS”) 199.670(4),

an informal dispute resolution proceeding was conducted resulting in the citations

being upheld. A second level informal dispute resolution proceeding was held on

1 We will use the child’s initials because he was a minor. 2 Billy Embry-Martin claimed that H.P. sustained the injury when he fell off a bench in the kitchen. Though not part of the appellate record, we take judicial notice that Billy Embry-Martin was charged with murder in the death of H.P. In 2019, a Hardin County jury found him not guilty of the charge.

-2- June 7, 2018, which rescinded citation C2761 and upheld the remaining two

citations.

Pursuant to KRS 199.670(5), Appellant appealed the Statement of

Deficiencies to the Hardin Circuit Court. On February 4, 2020, the circuit court

entered an order sustaining the Statement of Deficiencies. In support of the order,

the court determined that the record contained substantial evidence sufficient to

support the regulatory citations. As to the first citation, which alleged that Billy

Embry-Martin failed to comply with the general supervision and direction of the

child-placing agency directing the foster parent to maintain a safe environment, the

court cited evidence that Mr. Embry-Martin did not provide H.P. with a safe

environment. On the second citation, the court found substantial evidence that

Appellant failed to provide a required exception allowing more than four children

to be placed in the foster home. Having found substantial evidence to support the

citations, the circuit court dismissed the appeal and remanded the matter to

Appellee for further proceedings. As to Appellant’s arguments that the record was

incomplete and that Appellant failed to receive procedural due process, the court

determined that these arguments “simply do not rise to the level of impacting this

appellate review of a regulatory agency’s notice of deficiencies to licensee.”

Appellant’s subsequent motion to alter, amend, or vacate, and motion for a

rehearing or new trial were denied. This appeal followed.

-3- ARGUMENTS AND ANALYSIS

Appellant first argues that the Hardin Circuit Court erred in finding

that citations C3271 and C3791 were supported by substantial evidence. In its

final order, Appellee found that Appellant violated 922 Kentucky Administrative

Regulation (“KAR”) 1:310 § 8(4) by placing five foster children in the Embry-

Martin home without obtaining an exception from the Cabinet (citation C3271).

Appellant argues that it substantially complied with this regulatory provision

because Appellee was aware of the composition of the Embry-Martin home, as

well as the number of children who would be living there, before approving the

residence. Appellant asserts that it substantially complied with 922 KAR 1:310 §

8(4) by providing the information to Appellee, which then approved the residence.

In addressing this issue, the Hardin Circuit Court noted that its role

was to determine if substantial evidence in the record supports the Statement of

Deficiencies issued by Appellee. See Wasson v. Kentucky State Police, 542

S.W.3d 300, 302 (Ky. App. 2018). It found that both parties acknowledged 922

KAR 1:310 § 8(4) requires that an exception be obtained by Appellant in order to

place more than four children in a foster home. It further found that both parties

acknowledged that no exception was sought or granted. The court noted that §

8(5) provides that “a child-placing agency shall follow the procedure set forth in §

6(b) of this administrative regulation” to request such an exception. (Emphasis

-4- added). As compliance is mandatory, and because the parties agree there was no

compliance, the circuit court found substantial evidence sufficient to support the

issuance of the citation.

We find no error in this conclusion. The record contains substantial

evidence to support Appellee’s action, and the Hardin Circuit Court properly so

found. Nothing in the record or the law supports the conclusion that Appellee’s

apparent knowledge of the number of children residing at the Embry-Martin home,

taken alone, satisfies the regulatory scheme. Rather, the “shall follow the

procedure” language of § 8(5) is clear and unambiguous, and requires an exception

to be issued in advance of placement. The Hardin Circuit Court properly so

concluded, and we find no error.

As to citation C3791, Appellant asserts that the evidence supporting

the citation does not satisfy the definition of substantial evidence recognized under

Kentucky law. 922 KAR 1:310 § 12(17) provides that an approved foster parent

shall “[c]omply with general supervision and direction of the child-placing agency,

or, if applicable, the state agency that has custody of the child, concerning the care

of the child placed by the child-placing agency.” Appellant argues that Appellee’s

final order as to citation C3791, and the basis for sustaining that citation as found

by the Hardin Circuit Court, was the fact that Billy Embry-Martin was charged

with the murder of H.P., and that Billy Embry-Martin did not provide a safe

-5- environment as required by the regulatory scheme. Appellant argues that though

the death of H.P. is obviously tragic, Appellant was improperly cited for the

failure, if any, of Billy Embry-Martin to follow the policies and training provided

by Appellant. Appellant also contends that it provided ample proof that it trained

Billy Embry-Martin, thus satisfying its regulatory obligation. The substance of its

argument on this issue is that no evidence was adduced that Appellant could have

done anything to prevent the injury and death of H.P. As such, it argues that the

Hardin Circuit Court erred in sustaining citation C3791.

We must first note that contrary to Appellant’s assertion, the Hardin

Circuit Court expressly stated that it did not rely on the criminal charge against

Billy Embry-Martin, nor the outcome of that criminal proceeding, as a basis for

sustaining Appellee’s action as to citation C3791. Rather, the circuit court found

that Appellant “argues facts in its brief that are not contained in the record of this

appeal. The disposition of the criminal charges against the foster parent did not

occur during the administrative review of the Statement of Deficiencies and are

thus not part of the appeal record.” Instead, the circuit court cited the extensive

record resulting from the investigation which followed H.P.’s death, including the

statements of Billy and Travis Embry-Martin, medical providers, and law

enforcement. Those voluminous records included the Kentucky State Medical

Examiner’s Office finding of “inflicted closed head injury” by Dr. Amy

-6- Burroughs-Beckham; the Jefferson County Coroner’s Office classification of

H.P.’s death as a “homicide”; and a detailed evaluation by Dr. Melissa L. Curry,

medical director of Kosair Charities Division of Pediatric Forensic Medicine,

agreeing with the medical examiner’s finding of “inflicted closed head injury” and

expressing “GRAVE concern for the safety of any young child in environment in

which H.P.’s fatal injuries occurred[.]” (Emphasis in original.)

The circuit court determined that the testimony and the medical record

constituted substantial evidence to support citation C3791, i.e., that the Embry-

Martins failed to provide a safe environment for H.P. As another panel of this

Court previously noted,

While we are sympathetic to Necco’s plight, 922 KAR 1:310 § 12(17) does not require the agency to be on notice. It sanctions the agency when the foster parents act contrary to agency policies, which the Manleys did. This breach by the Manleys was corroborated by several witness statements and admissions by the Manleys themselves. Therefore, we must affirm the circuit court’s ruling regarding Citation C3791.

Necco, LLC v. Cabinet for Health and Family Services, No. 2018-CA-0103-MR,

2020 WL 2611148, 3 (Ky. App. May 22, 2020). We find no error.

Lastly, Appellant argues that the Hardin Circuit Court erred in finding

that Appellant was afforded procedural due process. It asserts that a deprivation of

its right to due process occurred because it was not allowed to confront or cross-

examine any witnesses that were interviewed by Appellee.

-7- The circuit court summarily dismissed Appellant’s argument on this

issue. We will note, however, that the statutory scheme addressing dispute

resolution between a child-placing agency and Appellee is expressly held to be

“informal,” KRS 199.670, and the record reveals that Appellant received each

element of the statutory process. Appellant requested informal dispute resolution,

specified the deficiencies in dispute, and provided supportive documentation.

Additionally, Appellant met with the Secretary’s designee pursuant to KRS

199.670(4)(b)(2), was given notice of both informal dispute resolution

proceedings, and had counsel present at these proceedings. We find no basis for

concluding that Appellant was denied procedural due process.

CONCLUSION

The Hardin Circuit Court properly concluded that citations C3271 and

C3791 were supported by substantial evidence of record and that Appellant was

not denied procedural due process. Accordingly, we affirm the order of the Hardin

Circuit Court.

ALL CONCUR.

-8- BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:

David F. Broderick Lucas Roberts Brandon T. Murley Cabinet for Health and Family Bowling Green, Kentucky Services Frankfort, Kentucky

-9-